In 12 hours, President Obama will make a landmark speech to the Muslim world. Osama bin Laden, he puts out a new audiotape attacking the president. Why I think this is a great thing.

Health care reform—Senator Bernie Sanders, one of the strongest voices for single payer, will tell us just what kind of public option the Democrats are really considering. Will it be strong enough to take on the big insurance interests?

And the race for 2012 is on. Which Republican will take on President Obama? New poll results are pretty interesting. That‘s coming up.

Osama bin Laden is back, and it‘s the best thing that could have happened to President Obama on his first day of his Mideast trip. There is no better reminder to Americans, to all of us, about the stakes we face and how important his outreach actually is.

President Obama is trying to fight extremism just like any president would. Bin Laden did President Obama, I think, a big favor and the country a big favor by providing the perfect backdrop for his speech to the Arab world tomorrow.

The president‘s message is simple: We‘re not extremists. We‘re not your enemy.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: In Islamic countries, I think there‘s a recognition that the path of extremism is not actually going to deliver a better life for people. I think there‘s a recognition that simply being anti-American is not going to solve their problems.

What I hope will happen as a consequence of this speech is people will have a better sense of how America views its relationship to the broader world and to Islam. I do hope that we can start opening a dialogue that will be more constructive moving forward.

(END VIDEO CLIP)

SCHULTZ: All right. You know how the game plays. The right wing is going to portray that as weakness.

You know, what‘s the option here? I mean, we‘re talking about true diplomacy. For eight years we have failed.

We‘re stuck in Iraq right now. Bin Laden is still out there. Let‘s try something new, because clearly cowboy diplomacy just didn‘t work.

President Obama sees an opening, an opportunity. Tomorrow he will go to Egypt and speak to the Muslim world.

Islam is the second most popular religion in the world. Twenty-one percent of the people on the face of the Earth are Muslim. And they are young. More than half of the Muslims are under 30 years of age. In Iran, two-thirds of the population is under 30 years of age.

Imagine that. An African-American president, a young African-American president, the son of a Muslim father, is going to talk to them, not with threats, with a clenched fist, but with an opened hand. How different.

This president is trying to put together a coalition of the willing to fight the real terrorists. Now, he wants the younger generation—and it is a generational fight. He wants them to step up and be a part of that. And I think that he can inspire a lot of young people around the world over there just like he has done it here in the United States.

President Obama is going to stand on the steps at Cairo University speaking to the world, surrounded by thousands. Bin Laden? Where‘s this guy? Well, he‘s using a tape recorder in a cave with a price on his head.

So you tell me, is that a powerful contrast? And ask yourself the question, who‘s really winning this war when it comes to the war of the minds?

Joining me now is Jamie Rubin, former assistant secretary of state under President Clinton and adjunct professor at Columbia University.

Jamie, great to have you here tonight.

JAMIE RUBIN, FORMER ASSISTANT SECRETARY OF STATE: Nice to be with you.

SCHULTZ: Some insight here. I think there‘s a tremendous amount of anticipation here because we know this president can communicate. How important is it?

RUBIN: It‘s a very big speech. It‘s perhaps the thing the Muslim world most awaited from his presidency. He said he was going to do it. He‘s now doing it.

And as you said earlier, part of the message is President Obama himself, being able to deliver these words of wisdom, being someone who represents the American dream and why America is so different from so many other countries. Young black men who live in this part of the world—many of them are black—are going to say, wow, America really is a special place.

That‘s going to help eliminate a lot of the damage that was done over the past eight years. And frankly, I see it as the final limitation, the end of the damage that President Bush had done.

First, you had all of the new policies on prisoners, and climate change, and international law and treaties. And now you have this speech which I think will repair the Bush damage. And from that we have to go forward with some successes.

SCHULTZ: In your opinion, how important is it? And do you think the president has got people around him that have told him to address that damage, to maybe admit some mistakes and articulate the new direction and talk about hope?

RUBIN: Well, I don‘t think there‘s a need in this particular speech to go back and look at many of the mistakes that President Bush has made. I think the world knows them. The Iraq War, certainly during its middle phase, was a great example of it.

We‘re dealing with the consequences in this part of the world of having Hamas rule in Gaza. People understand the big mistakes that were made.

What President Obama can do is to make absolutely clear the ways in which we want the Muslim world to speak openly about America the way they do privately. And I think he said this in an interview today—why do you have to say something different, these leaders? Why do they say something different in public when in private they tell us we have a joint agenda?

SCHULTZ: Does he address the Middle East peace solution? Does he address Israel? Does he take a strong stand and can he go overboard? What do you think?

RUBIN: I think he‘s going to have to touch all of the issues. He‘s going to have to touch his outreach to Iran, which is very important. He‘s going to make clear, as he and Secretary Clinton have in recent days, that we disagree with Israel on the subject of settlements. I think that will be encouraging in that part of the world.

But he doesn‘t want to overdo it. This isn‘t a speech about Israel policy. It‘s a speech about the future, about America‘s perception of tolerance in that part of the world, and the need for reform.

SCHULTZ: Well, Bush was at 94 percent disapproval rating, and the president now, Obama, is at 75 percent. I mean, the bar is pretty low. I mean, anything the guy does is going to be a victory, is it not? If he can just plant the seed of hope to the younger generation the way he‘s done in this country, we‘ve seen it, we‘ve heard it before.

RUBIN: Well, I think what‘s going to happen is these speeches don‘t have an immediate effect and I think we shouldn‘t see it in the polls. What we should expect, though, is the policies of the last six months, where you have a change on prisoners in Guantanamo and treatment of prisoners, where you have a change on support for international law and treaties, where you have a change on settlements in the West Bank, where you have all these policy reversals combined with the message of tolerance and an outstretched openness and dialogue, I think will together sink in over time and improve our standing, but it‘s not going to fix our problems.

We‘re still going to have problems with the Muslim world on a lot of issues when this is over. But it‘s going to get rid of, in my opinion, the damage and the unnecessary lack of respect and support for the United States that President Bush engendered.

SCHULTZ: Jamie, do you think that he has to say we‘re getting out of Iraq, we‘re reducing our presence, it‘s time for them to move on? Do you think he has to talk about some of the things that he talks about on the American campaign trail?

RUBIN: Well, yes. I think he should touch on the fact that we have a glide path in Iraq to an American withdrawal. That will be encouraging, and things are so far—they are very difficult, very painful in Iraq, but so far they‘re going reasonably well.

And he also has to explain in Afghanistan what we‘re doing there, why we‘re trying to help a democratic government in a crucial Muslim country, Afghanistan, succeed against extremists. And as you said, Obama bin Laden piping up today is the best way to juxtapose what we in America are hoping for versus the Taliban style Stone Age caliphate that those people stand for.

Joining me now is Maryland Senator Ben Cardin, a member of the Foreign Relations Committee.

Senator, good to have you on tonight.

What do you make of the Osama bin Laden tape that was released? Will it have any impact? Does it set the table to help the president in any way?

SEN. BEN CARDIN (D), MARYLAND: Well, just a constant reminder that it‘s a dangerous world and we have a lot of work ahead of us. So I think it does set the seriousness of the trip, the importance of this trip, and the need for those who reject extremism to work together.

SCHULTZ: Do you think the president is going to take a multifaceted approach in this speech and try to hit a lot of things, or is it going to be an overriding theme of one subject or another? Is there a chance that he would try to reach too far in a speech?

What do you think?

CARDIN: Well, I think he wants to set a tone, set a tone of America wanting to work with the Arab world, wanting to bring peace and stability to that region, wanting to reach out to improve the economics of the people who live in that region. So I think it‘s going to be that the United States does not want to dictate policy, but wants to work with the Arab states to bring about prosperity and peace in that region.

SCHULTZ: Senator, one of the big stories on Capitol Hill in recent days obviously has been the visit that Judge Sonia Sotomayor has had on the Hill.

What‘s your impression now? Do you think that she has really made some headway and maybe softened the resistance to set the table for what might be smooth hearings?

CARDIN: Well, I had a chance to meet with her today. I must tell you, first, I‘m very impressed with her background, her experience as a trial judge, appellate judge, as a prosecutor. She answered all my questions very openly and freely.

I want to make sure that the nominee has a passion for the Constitution and how she will deal with difficult issues. And I must tell you, I think she‘s an extremely impressive candidate.

SCHULTZ: Smart? Because there‘s been a lot of attacks on her. First impression, is she a very intelligent person?

CARDIN: No question about it. She‘s intelligent. I think she also knows how to raise issues.

She impressed me by how she wants to work together to try to bring about the type, I think, of action on the Supreme Court, act as an independent branch of government, a check and balance on the executive and legislature.

I think she will follow the law, follow the president. That‘s what we are looking for.

Now, this is the beginning of the process. We still have a long way to go.

SCHULTZ: And Senator, what do you make of Newt Gingrich backing off on his comment? Which I think obviously shows that some on the right have gone way too far. Did you get a sense, if she paid attention to any of that or was bothered by all of that?

CARDIN: Well, I think Newt Gingrich did the right thing. Clearly there was a problem with the statements. I think he recognized it. And it‘s moved on. That was just uncalled for.

Next up, what‘s the president‘s plan for health care reform? Will it include a public option? One strong enough to take on the big insurance companies and all the interests that are out there?

I‘ll ask Senator Bernie Sanders next, right here on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

President Obama wants to get health care done this year. He told Democratic senators they need to put together a reform bill by August? Gosh, that‘s a short window of opportunity, isn‘t it? But what does reform really mean?

Finance Committee Chairman Max Baucus told the president to consider taxing health care benefits? That‘s not the kind of reform I was looking for, and I don‘t think it‘s the kind of reform you were looking for.

But there was at least one real voice of change in that meeting that took place yesterday—Senator Bernie Sanders of Vermont, longtime supporter of single payer.

Senator, good to have you on tonight.

You also had an important meeting today with Max Baucus. Where does chairman of the Senate Finance Committee stand on single payer and public auction? And I know you brought some advocates of that side of the table to the meeting today.

SEN. BERNIE SANDERS (I), VERMONT: Well, it was a good discussion. We brought some of the leading advocates of single payer into Senator Baucus‘ office. It was a good discussion. Needless to say, he has not changed his view. But what I am trying to do is at least get single payer on the table so that the American people can understand why we have the most costly system in the industrialized world and at the same time have 46 million Americans without any health insurance, more who are underinsured.

Ed, we have got to get to the root cause of what‘s going on in this country in terms of health care, and that has to do with the very negative impact that private health insurance has on our entire system. While health care costs are soaring, the private health insurance companies are making huge profits. They are paying their CEOs on average for the major companies $14 million a year. And they are costing us hundreds and hundreds of billions of dollars in terms of needless and useless bureaucratic waste.

SCHULTZ: But Senator, if it‘s what the people want, why can‘t we get it passed or at least on the table? You mean to tell me that the pharmaceuticals, the big pharma HMOs, insurance companies, they are so powerful that they can intimidate senators to the point that this is just the cards that we‘re dealt with and nothing is really going to change? Is that what it comes down to, the lobbyists and the power there?

SANDERS: That‘s what it comes down to, to a very significant degree. It comes down to the fact that the insurance companies, the drug companies, the medical equipment suppliers are spending—have spent hundreds of millions of dollars in recent years in campaign contributions and lobbying. They have enormous power. And despite the fact that the mass—the vast majority of the American people want real change in their health care system.

SCHULTZ: Sure they do.

SANDERS: Of course they do. They understand the system is not working. I‘m afraid the special interests here in Washington have just a great deal of power.

SCHULTZ: It‘s unfortunate. You know, you think about where we are, Senator, we have gone through eight years of the Bush administration not addressing any of this other than to tell us to go out and get a health care savings account.

We go through an exhaustive presidential process, and now we‘re told we‘ve got 60 days here, now or never? Is this how it works?

SANDERS: Well, I think what you‘ll have to look at is what the end product will be. Now, I share your concern about this being a very, very short window. And soon as I leave this program, I‘m going to back to the health committee meeting to continue discussion of what we‘ll be seeing.

But the bottom line is the American people have got to weigh in on this debate. In my view, we‘ve got end the role that private health insurance are playing in our health insurance system today. We‘ve got to move toward a cost-effective, nonprofit system which is Medicare for all, I think, administered at the state wide level. And if you do that, we can provide without spending one nickel more comprehensive health care to all of our people.

SCHULTZ: That is very true. We‘re not saying that enough. That‘s for sure.

And your definition of public option, as to what they are talking about, what kind of public option is Max Baucus talking about?

SANDERS: Well, I‘ll let Mr. Baucus speak for himself. What I‘m talking about is something roughly equivalent to Medicare right now, and opening up a Medicare-type program for all Americans.

SCHULTZ: To give the private sector competition?

SANDERS: Well, more than competition. I think that a Medicare system can be a better system than the private insurance because the administrative costs will be substantially less.

SCHULTZ: It doesn‘t sound very encouraging, Senator.

SANDERS: Well, the fight is not over. And I think if the American people get involved in the struggle to say that at the very, very least, we want a strong public program, I think we can make some good progress if we move on primary health care, get more doctors out there, more community health centers, we can make some progress, quality control.

There are opportunities to make some real progress.

SCHULTZ: Senator Bernie Sanders, always a pleasure. Good to have you on tonight.

Next up on THE ED SHOW, “Psycho Talk.” One Republican‘s crazy conspiracy theory about President Obama and General Motors, it‘s next in “Psycho Talk.”

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Have you heard some of the crazy things that are being said by conservatives?

It‘s time for “Psycho Talk.”

Hold everything tonight. This is not the “Psycho Talk,” but I‘m really a little dismayed that Michele Bachmann has not been in “Psycho Talk” lately. Has she gone into her shell?

I‘m missing her. I‘m really missing her.

We‘ll see what‘s happening there. The talk is that she might be running for governor in Minnesota.

Well, tonight it‘s already started. Conspiracy theories are out and about, about the administration‘s real plans for General Motors. The real reason the administration took a majority stake in the auto company is to win votes in 2012. As a majority stakeholder, you see, the White House can take control of GM‘s daily affairs and operations, and it can support, you know, by going around and giving out new auto plants.

SEN. LAMAR ALEXANDER ®, TENNESSEE: As the elections approach, might not the White House be tempted to build plants in states it might carry instead of states it might not?

(END VIDEO CLIP)

SCHULTZ: The truth is Obama won a lot of those states.

Now, it‘s not impossible some of those states will in fact get new GM plants, but thinking Obama wanted to take a majority stake in General Motors to reward states for voting for them? Come on, Senator, that‘s “Psycho Talk.”

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

In less than 12 hours, President Obama will speak to the Muslim world. This is important to the president. He talked about it on the campaign trail and at his inauguration.

He‘ll make the speech at Cairo University in Egypt. What kind of reception will he get from Muslims, especially young Muslims?

For more on that, let‘s bring in our panel tonight—Todd Webster, Democratic strategist. A.B. Stoddard is associate editor of “The Hill.” And John Feehery is a Republican strategist.

Let‘s start with you, A.B., tonight.

What‘s the mission here? What can the president really accomplish in one speech?

A.B. STODDARD, ASSOCIATE EDITOR, “THE HILL”: Well, I really think we really have to take him at his word that we have to sort of modify our expectations. It is one speech. Not much is going to change.

Many of the problems in the Middle East are longstanding issues that are to some intractable. He does not think one speech is going to help everything. And he wants—remember that President Obama is the ultimate Mr. Long View.

I think he‘s laying down a marker. He wants to be there. He said almost two years ago he was going to do this.

He‘s going to say that we‘re not at war with Islam. He‘s going to try to come with a message of openness and understanding. But I don‘t think that he‘s going to lay out so many bold strikes that he takes great political risk, and I don‘t think he‘s going to solve any huge problems in one day.

SCHULTZ: John Feehery, the conservatives are going to watching this closely thinking that the president may go too far, but some pretty harsh words have been leveled on the president, that some strong voices out there have said they hope that he fails. What position do conservatives take leading up to this speech when it comes to expectations? I know you don‘t want him to fail. But a lot on the right have said that.

FEEHERY: Well, you‘re right, Ed. I don‘t want him to fail. I think we do need to have a better relationship with much of the Islamic world. I do think, however, some people are going to be very concerned, especially in Israel and Netanyahu‘s cabinet, that he goes too far and presents a sign of weakness.

This is a very delicate situation going on in the Middle East between Palestine and Israel, the settlements in Israel. All those things are very complicated. I do think that for the president, conservatives are going to be looking at him very carefully, making sure he doesn‘t offer too much concessions to the Iranians, for example.

I think it‘s appropriate for him to go to Cairo. Egypt is obviously extraordinarily important in the Middle East when it comes to issues with Israel and Palestine. So I do think it‘s appropriate for him to go there.

SCHULTZ: Todd, should he be aggressive? Should he be very calculated? Because this speech could set the tone for the rest of his year here. What do you think?

WEBSTER: I think, look, for eight years we had a philosophy in the administration that said we could try to kill or capture every Muslim who disagree with this country. That was not workable in the long term. I think what he‘s doing now is trying to reach out to the Muslim world, to find where there is common ground, where there are common economic opportunities.

He started the trip in Saudi Arabia, which is powerfully symbolic for the Muslim world, being the sites of Mecca and Medina. He‘s now going to Egypt. From a national security perspective, it will make us safer to have a dialogue and to have a better relationship, and not having a billion and a half of the world‘s people jihading against us.

SCHULTZ: Panel, when you look at the surveys that have been out there for a number of years, 80 percent of people in Iraq want the United States to get its forces out. Should the president—I think he should. I think the president should go out there and give this speech and say, look, our mission is not to occupy. Our mission was whatever it was in a different administration. But I‘m going to reduce forces. We‘re going to have a change of strategy. I‘m here to tell you—

I really think the president should be very up front and strong about the fact that we don‘t plan on being in Iraq any longer than what the agreement says right now. AB, what about playing that card?

STODDARD: Well, I mean—I think, Ed, President Obama is not Ed Schultz. He‘s a cautious politician. He entered office, and he immediately massaged his Iraq withdrawal plan, as you know. I do not think he‘s going to throw out specifics that he will be held to, that might not be workable tomorrow, particularly with regard to withdrawing from Iraq.

I think that he‘s really straddling a lot here. John is right. The conservatives are watching to see if he apologizes, to see if he over-reaches with Iran, to see if he‘s too punitive with Israel. And I think that even Saudi Arabia, look what happened to him. He wasn‘t planning on going to Saudi Arabia. The Saudis sort of coaxed him into coming, and he planned a last minute stop there first.

He‘s straddling so many interests, so much volatility politically for us overseas with all of these different problems. And I just don‘t see him taking the bold stroke that you hope he will on withdrawing from Iraq or on other topics. I think he‘s going to try to straddle.

SCHULTZ: I think he has to remember what the American people want, too. Panel, stay with us. We‘ll come back with more on this. Joining me now is Congressman Adam Smith of Washington. He just got back from a trip in the Middle East. Congressman, what are the people in the Middle East looking for from President Obama?

REP. ADAM SMITH (D), WASHINGTON: Well, they are looking for someone who is going to show them that he wants a partnership, that he wants to reach out and work with them to build a more stable and peaceful world. And I agree with much of what you have said and what your panelists have said.

The message from Osama bin Laden that brings a lot of young Muslims to his side that otherwise wouldn‘t be there is that the west is at war with Islam. Now that is categorically not true. But having a president of the United States go to a Muslim nation and say it to the Muslim people is incredibly important.

SCHULTZ: What are the expectations, Congressman? Are we viewed at least a little bit better now that we‘ve got a president that is going to go over there with an open hand and try to start a new dialogue? What do you think?

SMITH: Yes, we are viewed a little better. The polling in the Muslim world makes that clear. That‘s the start. There are a lot of tough issues that we‘ll have to deal with going forward, dealing with Iran, getting our withdraw from Iraq done and done right, dealing with Afghanistan.

But the point is, we‘re going to have to have an open dialogue. We‘re going to be able to find more allies and more people in the Muslim world who want to work with us. They don‘t support bin Laden and that ideology.

SCHULTZ: Congressman, do you think the president should address the Iranian nuclear situation in this speech at Cairo and also nuclear proliferation? He wants to rid the world of nukes. Should he go down that road and lay a blue print? What do you think?

SMITH: Well, I think the specific—whether you‘re talking about the

Israeli/Palestine conflict or Iran or Iraq—the specifics are maybe not

as important in this speech as the message that we‘re here to work with you

to find solutions to these problems, and that we don‘t, as you said earlier

we don‘t want to occupy Muslims land.

If you get too much into the specifics of exactly what our policy should be with Iran, I think that might lead him down a path in this particular speech that he doesn‘t want to go. I think the broader message is what is more important in this speech.

SCHULTZ: Congressman, do you think that the Middle East, now that you‘ve just come home from the trip, are they yearning for diplomacy? Are they ready to meet the president with an open hand? Is there a different attitude about dealing with the United States, not only in how they view us, but in how they are expecting us to act when it comes to foreign relations?

SMITH: In many countries, yes. I want to keep in mind that the Middle East is not homogeneous. There is different interests in different countries. I visited Israel, Lebanon, Syria, and Iraq on this trip. I‘ve been to Jordan before. I think what you find there is there is a definite desire to be part of the world, to be engaged in the global economy. In many instances because these countries have economic needs. They know if they‘re not doing business with the US and the west, they‘re going to have a hard time meeting those needs. They want a relationship with us.

SCHULTZ: Well, they want some respect. And I want to ask you this about Israel. Running up to the presidential election, the opponents of President Obama, now President Obama, accused him of not being a good ally of Israel. Is this a test for the president? And do you think he could go too far in this speech? Is he walking the balancing beam here? What do you think?

SMITH: He is definitely walking a balancing beam between a lot of competing interests on a lot of competing issues. I think what the president has made clear is that he supports a two state solution between Israel and Palestine.

SMITH: I think it‘s worth it to say that, yes. I think that‘s a broad consensus that is held by many people, many people in Israel for that matter. And it makes it clear that the president wants a peaceful solution to that conflict, and makes it clear that we want to be part of that solution.

Now, getting beyond the basic two state solution into specifics, as to what that looks like, I certainly don‘t think the president should go there. But a two-state solution is where it‘s got to go in order to find a peaceful resolution in that region.

SCHULTZ: Congressman Smith, always a pleasure. Good to have you on tonight.

SMITH: Appreciate it. Thanks, Ed.

SCHULTZ: Thank you. Next up, the race for 2010 is on. How President Obama is setting up the Democrats for another win, another big year. It‘s next in my playbook. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In my playbook tonight, pre-season, President Obama back in action for strategy, right? The president is building a Democratic majority that will help the party in 2010 and beyond. He‘s keeping his promise to bring Republicans into the White House and the administration. He‘s doing an end run around the competition. He‘s taking competitors off the field.

Let‘s take a look at what the president has done and his winning plays. The GOP has a rising star in the Mountain West are. So what does President Obama do? He sends Governor John Huntsman on a slow boat ride to China. That‘s probably a great pick.

Now, Obama names a former popular Congressman from the Midwest to sell moderates on his centrist agenda. He appoints Ray LaHood as transportation secretary. Obama builds a cozy relationship with Republican governors in the big population states like California and Florida. He gets Arnold Schwarzenegger and Charlie Crist on board. To do what? Sell the stimulus package.

And then yesterday, President Obama appoints John McHugh, one of three remaining Republican members of the Congress from New York, to be the secretary of the Army. The president is showing he is sincere about reaching out to Republicans, but his choices are no coincidence. Are they?

He‘s using a regional strategy to take the juice right out of the competition, the GOP. Joining me now is Democratic strategist Steve Hildebrand. Steve was the deputy national campaign director for Barack Obama‘s presidential campaign. Is this a theory or is this really happening? What do you think, Steve?

STEVE HILDEBRAND, DEMOCRATIC STRATEGIST: Well, I think the president, Ed, most importantly, is focused on trying to put this country and, to some extent the world, back in order. We‘ve got a lot of work to do. He knows it. He‘s driven. He‘s focused, and he‘s moving very quickly.

SCHULTZ: But he just happens to be picking off some people that might be big players later on.

HILDEBRAND: You know, I think that‘s right. But he also wants to surround himself, as he always has done, with the best and the brightest, with the exception of me, of course. I think he knows and I think the Democrats on the Hill know that if we solve some real problems, as the voters demanded in the 2008 elections, that re-election will come naturally.

SCHULTZ: So you admit that he is side-lining Republicans? This is a political strategy here. You can find competent people in the Democratic party or the Republican party, but he is definitely side lining some competitors?

HILDEBRAND: Look, President Obama is a different kind of leader. He is somebody who has always surrounded himself with good people. But he‘s also surrounded himself with diversity. And that‘s very, very important to him. He is somebody who wants to hear different opinions and bring people together to try and solve problems.

So I don‘t think it‘s so much about politics and taking people off the table for future elections, Ed, as it is trying to bring a diverse opinion into his administration, which he is very insistent upon.

SCHULTZ: We all know that Rahm Emanuel can be a political pit bull, bulldog, whatever. He‘s a tough customer. Do you think he‘s behind this in any way, or influencing the president?

HILDEBRAND: Well, he is the chief of staff. So he‘s going to have tremendous influence. And Rahm is a political bulldog. And I applaud him for that. He‘s a skillful individual, and it‘s why he was brought into the inner circle in the White House.

But honestly, this is a time where President Obama knows that if we don‘t solve these problems, Democrats are not going to hold the majorities in Washington. He‘s not going to get re-elected. And it‘s really what he sought the presidency for, which is to try and help the American people.

SCHULTZ: Well, he sought the presidency to create jobs, and there are a lot of people out of work after the bankruptcy by GM. In the Rust Belt, could it be a political backlash if jobs are not created in Michigan, Ohio, Indiana, Tennessee? What do you think?

HILDEBRAND: Well, I think it‘s important to talk about not just what happened with the auto industry, but to talk about the opportunities that exist for the future. Some of those jobs are going away in part because the auto companies didn‘t keep up with consumer demands. So if they switch their gears and produce autos that consumers are demanding—

SCHULTZ: But the jobs, Steve, if he doesn‘t produce jobs in those states, is there going to be a political backlash?

HILDEBRAND: We can see a resurgence in the auto industry if the automakers do what the consumers want. But secondly, these states need to embrace a green economy. They need to be leaders in moving forward and trying to create green jobs within their states. President Obama will applaud that. He will help it. He‘s working on legislation right now, as he did with the stimulus bill, to create more green jobs in this country, and take this turn in the economy that is so desperately needed.

SCHULTZ: And finally, Steve, on health care, if the Obama administration doesn‘t deliver a real package of change, reform, overhaul, whatever you want to call it—the American people want coverage and they want cost reduction. How crucial is this? We‘re being told now or never, 60-day window. They‘ve got to have it done before they go on break in August, which I think is really goofy. What if they don‘t deliver a satisfactory package? Then what happens?

HILDEBRAND: Well, remember, Ed, there are two ends of Pennsylvania Avenue. There‘s the White House end and there‘s the Congressional end. Barack Obama, as president of the United States, will do his part in pushing for health care reform. It is something that is near and dear to his heart. He will make this right for the American people.

But if the people at the other end of Pennsylvania Avenue in Congress try to railroad it, try to stop it, listen to the special interests, then health care reform could be in trouble. If they want to be re-elected, they should deliver health care reform to the American people, because that is a big-time demand for the voters.

SCHULTZ: No doubt. Steve Hildebrand, good to have you on tonight.

Thanks so much.

HILDEBRAND: Thanks, Ed.

SCHULTZ: Next up, the Republicans took a beating in the last election. Who is leading the pack to take on President Obama in ‘12? The results of a new presidential poll next on THE ED SHOW. Stay with us.

SCHULTZ: Welcome back to THE ED SHOW. Just think, election day 2012 is just 1,251 days away. But Republicans are already running hard against the president on every move he makes. We all know the drill when it comes to leaving the door open to a presidential run.

Remember this one from Sarah Palin?

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN ®, ALASKA: God, if there is an open door for me somewhere—this is what I always pray—don‘t let me miss the open door. Show me where the open door. Even if it‘s cracked up a little bit, maybe I‘ll plow right on through that, and maybe prematurely plow through it. But don‘t let me miss an open door.

(END VIDEO CLIP)

SCHULTZ: Well, for some of these guys the hinges have just come way off. Here‘s a look at a few more of them who are not running for president.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, FMR. HOUSE SPEAKER: The thing is as dangerous as the president of the United States trying to run an auto company while doing everything else he‘s doing. I think you need to focus on what are you going to do in 2009, not what would you do 2012. We‘ll talk later on. But I think for the next two year, let‘s focus on trying to get the country back on track.

MITT ROMNEY, FMR. GOVERNOR OF MASSACHUSETTS: I‘m looking right now to try to get some Republicans elected in 2009 and 2010. What happens down the road, well, it‘s a very distant horizon. We‘ll look at it later.

GOV. TIM PAWLENTY ®, MINNESOTA: I don‘t know what the future holds for me. I‘m not ruling anything in or out. I‘m just going to wait and see how this unfolds. I don‘t think these early number mean anything. As you know, whoever is in the lead a couple of years out is almost never the winner anyhow.

SCHULTZ: The statue of Ronald Reagan was unveiled at the Capital today. These guys talk about carrying his mantel. I haven‘t seen any of them do it. Time to bring back our political panel, Todd Webster, AB Stoddard and John Feehery.

Let‘s look at some of the numbers. The recent CNN poll has gotten Mike Huckabee listed at 22 percent, as to who Republican voters would favor. Sarah Palin is at 21, Mitt Romney at 21. And the Newtster in at 13. I think Newt Gingrich saw some bad poll numbers early on and took back that comment on Judge Sotomayor. Jeb Bush is at six percent, with all of that name recognition.

What does this mean, John Feehery? What do you think, anything at all?

FEEHERY: Absolutely nothing, Ed. It‘s early. I remember when people told me about this guy Barack Obama four years ago, I had never heard of him. All of a sudden, he‘s our president four years later. You don‘t know. Republicans tend to go with the front-runner who came in second place in the last nomination fight, and that would be Mitt Romney. So that would be my guess. But I think it‘s awfully early to make any predictions. Who know what will happen.

You never know about Jeb Bush. He‘s probably the smartest of the lot.

SCHULTZ: I wouldn‘t disagree with that. Mitt Romney has been pretty vocal as of late as to how the president is handling the manufacturing situation in Detroit. Here‘s what he had to say.

(BEGIN VIDEO CLIP)

ROMNEY: The government should get out right now. I don‘t want the Sierra Club telling General Motors what kind of cars they have to build. Let‘s let the tax payers, the share holders decide how GM is going to be run.

(END VIDEO CLIP)

SCHULTZ: AB, is that the strategy, the best strategy, in your opinion, to just hit on the issues right now?

STODDARD: Well, you know, the bad news in this poll is actually for Mitt Romney, who came in behind Mike Huckabee and at parity with Sarah Palin. Mitt Romney is the anointed one. He‘s the second place finisher, as John said. The Republican party likes to let their loser come back. The Democrats don‘t.

This is really stunning. Mitt Romney is working very hard, not only criticizing President Obama on foreign policy and domestic policy; he‘s trying hard not to call anyone a racist. He‘s working extremely hard behind the scenes, as he just said, in that clip, trying to elect Republicans. What he‘s doing is ingratiating himself with as many members of the party as he can, and helping them. That‘s the smart way about it.

Sarah Palin is not helping herself. Mike Huckabee is making very strong statements. And he has a TV show that‘s upped his visibility. But I think this poll is bad news for Mitt Romney, who is working harder than anybody to be the nominee in 2012.

SCHULTZ: Todd Webster, what do you make of Newt Gingrich? This guy gets more air time than I do. He‘s on any show he wants to get on. He‘s very vocal on every issue. He‘s edgy with his comments, over the top on some others. Are Republicans rejecting Newt Gingrich? Sitting at 13 percent name recognition, being the former speaker, certainly isn‘t a problem. What do you think?

WEBSTER: Well, I think he gets a lot of air time because he‘s edgy and he‘s quotable, and, to my way of thinking, he‘s pretty radical. so I think he makes for a good sound bite on television. I think the reality is the Democrats—the history is that the Democrats fall in love and Republicans fall in line, to AB‘s point earlier, that the guy whose turn it is is probably Mitt Romney.

My own view of Romney is he‘s extremely stiff. He makes Al Gore look electric. Sarah Palin, I think, given the way the McCain campaign savaged her at the end of the campaign, the family problems that she has—I think the Palin candidacy is a bit of a side show. The person who I think looks the strongest right now is Mike Huckabee. He‘s folksy. He‘s populist. He‘s conservative, but not abrasive. He‘s a proven vote getter. He‘s the guy who won Iowa in 2008.

So I think he‘s the one who may look the strongest and who will wear the best. To John‘s point earlier, it‘s extremely early and we may not know who the nominee is at this particular point, because it‘s such a long way off.

SCHULTZ: You know what I find interesting, is that Huckabee, Palin, Romney, Gingrich and Bush—where is Tim Pawlenty? John Feehery, if there‘s anybody out there who would be a dark horse, it would be Tim Pawlenty. He‘s a governor. He‘s a true conservative. He was connected to McCain. I know they lost everything. But this guy knows how to win. He‘s a good talker, a good communicator. Are you surprised that his name was not thrown out there?

FEEHERY: Not really. I think nobody has heard of him. The big problem for him is name ID. These early polls, remember Rudy Giuliani and Hillary Clinton were going to both be the nominees for their party because had heard of those two. It turned out that Rudy Giuliani could not win a primary because people didn‘t agree with him on any of his positions.

With Tim Pawlenty, they have never heard of him, but they do agree with him on his positions, and they know that he‘s an effective governor, and he‘s a proven vote getter, which is more important right now, and a proven vote getter with a part of the electorate that we have trouble with, which is independent voters and swing voters. We need to get those if we‘re going to really compete in the next election.

SCHULTZ: Around the horn one more time. AB, let me ask you, how do you get health care reform in 60 days in Washington, DC? Explain that to me.

STODDARD: Well, as I said on this very show, Ed, easy things don‘t pass in Washington in 60 days. But actually, they are further along down this path than we thought they would be. They‘re working very hard, mostly Democrat to Democrat to resolve differences. We know there will be a public plan. I‘m sorry to tell you, Ed, we know there will not be single payer.

I think they will pass something in August or, at worst, in September. And I think that it will be likely just a Democratic bill. I don‘t expect a lot of Republican support.

SCHULTZ: Todd, What do you think?

WEBSTER: You know, there was a fascinating story in Sunday‘s “Washington Post” by Alec MacGillis about blue states and red states, and how health care reform would be a massive transfer of wealth from the blue states to the red states, to the west and to the south. The state of Massachusetts, three percent are uninsured. The state of Texas, 25 percent are uninsured, because the south and the west have weaker unions, and more immigrants, and a stingier government.

So I think Republicans wanting to show health care, wanting to provide for their folks, would be wise to support it.

FEEHERY: Can I jump in real quick?

SCHULTZ: Go ahead.

FEEHERY: The biggest problem with health care is how do you pay for it?

(CROSS TALK)

SCHULTZ: Great panel tonight. Thanks so much. That‘s THE ED SHOW. I‘m Ed Schultz. We‘ll be back here same time tomorrow night, 6:00 Eastern time on MSNBC. “HARDBALL” with Chris Matthews starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.